The insanity of minting a trillion dollar platinum coin

I've resisted writing about this because at first, I thought it was a joke - no one can be serious about the idea of having the Treasury Department mint a trillion dollar coin.

The idea is that the treasury secretary can take advantage of a loophole allowing him to mint a platinum coin of any denomination. Print a $1 trillion coin, and -- presto -- there's a $1 trillion in spare capacity under the debt ceiling. Plus, since the coin isn't going to make it into circulation, it should not be inflationary. And further, it still leaves Congress in control of the purse.See video explanation of idea.

"It's easy to make sententious remarks to the effect that we shouldn't look for gimmicks, we should sit down like serious people and deal with our problems realistically. That may sound reasonable -- if you've been living in a cave for the past four years. Given the realities of our political situation, and in particular the mixture of ruthlessness and craziness that now characterizes House Republicans, it's just ridiculous -- far more ridiculous than the notion of the coin," Krugman writes.

Of course, there's a hitch or two in the plan to mint The Coin. For one thing, numismatizing the debt by striking trillion-dollar debt discs is not exactly what former representative Mike Castle (R., Del.) had in mind in 1995 when he introduced the legislation that turned into the provision in public law 104-208. Dylan Matthews of the Washington Post tracked down this "unsuspecting godfather" of the platinum gambit, and Castle confirmed as much. "That was never the intent of anything that I drafted or that anyone who worked with me drafted," Castle told Matthews. Indeed, the legislation was designed to give the Treasury flexibility to create more affordable platinum coins for collectors. To use that authority to backdoor the 17th and 18th trillion dollars of the national debt would be, according to Castle, "so far-fetched and so black helicopter-ish a type of methodology of trying to resolve something like this that I think the public would totally scoff at it."

Some on the left understand this. Take, for instance, Kevin Drum of Mother Jones, who flatly titles a post on the subject "No, a $1 Trillion Platinum Coin Is Not Legal." Drum, doubting there is enough of the requisite straitjacket brand of strict constructionism in the U.S. court system to uphold such a tortured reading of the statute, dismisses the ploy as "the kind of thing that Herman Cain would come up with" (the dread reductio ad Hermanum, a conversation-stopper in progressive circles).

I've resisted writing about this because at first, I thought it was a joke - no one can be serious about the idea of having the Treasury Department mint a trillion dollar coin.

The idea is that the treasury secretary can take advantage of a loophole allowing him to mint a platinum coin of any denomination. Print a $1 trillion coin, and -- presto -- there's a $1 trillion in spare capacity under the debt ceiling. Plus, since the coin isn't going to make it into circulation, it should not be inflationary. And further, it still leaves Congress in control of the purse.See video explanation of idea.

"It's easy to make sententious remarks to the effect that we shouldn't look for gimmicks, we should sit down like serious people and deal with our problems realistically. That may sound reasonable -- if you've been living in a cave for the past four years. Given the realities of our political situation, and in particular the mixture of ruthlessness and craziness that now characterizes House Republicans, it's just ridiculous -- far more ridiculous than the notion of the coin," Krugman writes.

Of course, there's a hitch or two in the plan to mint The Coin. For one thing, numismatizing the debt by striking trillion-dollar debt discs is not exactly what former representative Mike Castle (R., Del.) had in mind in 1995 when he introduced the legislation that turned into the provision in public law 104-208. Dylan Matthews of the Washington Post tracked down this "unsuspecting godfather" of the platinum gambit, and Castle confirmed as much. "That was never the intent of anything that I drafted or that anyone who worked with me drafted," Castle told Matthews. Indeed, the legislation was designed to give the Treasury flexibility to create more affordable platinum coins for collectors. To use that authority to backdoor the 17th and 18th trillion dollars of the national debt would be, according to Castle, "so far-fetched and so black helicopter-ish a type of methodology of trying to resolve something like this that I think the public would totally scoff at it."

Some on the left understand this. Take, for instance, Kevin Drum of Mother Jones, who flatly titles a post on the subject "No, a $1 Trillion Platinum Coin Is Not Legal." Drum, doubting there is enough of the requisite straitjacket brand of strict constructionism in the U.S. court system to uphold such a tortured reading of the statute, dismisses the ploy as "the kind of thing that Herman Cain would come up with" (the dread reductio ad Hermanum, a conversation-stopper in progressive circles).